The Bank of Korea Deputy Governor Downplays the Won's Decline, Advocating Flexible Policies Beyond "Hawk-Dove" Debates

Golden Ten Data reported on March 31 that Shin Hyun-song, the nominee for governor of the Bank of Korea, downplayed the significance of the recent decline in the local currency exchange rate and, as he prepared for his confirmation hearing, cautioned against simply labeling policy stances as “dovish” or “hawkish.” Speaking to reporters in Seoul, Shin stated: “The exchange rate level itself does not hold that much significance, so it should not be over-interpreted.” He added that, despite the weakness of the Korean won, indicators of US dollar funding conditions remain solid. On Tuesday, the exchange rate of the Korean won against the US dollar touched 1528.6, its lowest level since the global financial crisis. Shin commented: “Indicators related to US dollar liquidity are actually quite robust, so there is less need now than in the past to directly link exchange rate fluctuations to financial instability.” His remarks suggest that under his leadership, the Bank of Korea may shift away from directly equating exchange rate volatility with financial risk.